Cabinet Reshuffle Likely To Push Jaitley Out Of Finance

Prime Minister Narendra Modi may look to press the reset button on his leadership this spring to reinvigorate stalled economic reforms and appease critics, eyeing a mix of tried and tested allies and fresh blood, senior government sources said.

The Budget 2016 government has overseen rapid economic growth, but failed on tax and land reforms, and the euphoria that met Modi's 2014 election triumph has given way to investor disillusionment; stocks have erased all of their gains since he won power.

The ruling Bharatiya Janata Party (BJP) faces a crucial election test in the most populous state of Uttar Pradesh in 2017 that it probably needs to win if it wants to hold on to power nationally in 2019.

“Modi needs to identify new talent and bring changes in his government. It will be too late if he fails to do it now,” said veteran newspaper editor and commentator Shekhar Gupta.

With an eye on Uttar Pradesh, Modi looks set to keep Amit Shah on as BJP president, sources said, extending his closest aide and election campaign manager's tenure by three years when it expires at the weekend.

However, Finance Minister Arun Jaitley, responsible for delivering the Modi message to international investors, may move to defence after he delivers his annual Budget in late February, sources said.